One of the things that is still discouraging to me is that the people who are most vocal about what we need to do, are the ones who didn't see this coming. Greenspan is the worst at this and most of the policy makers can be lumped into that bucket. I think Paulsen is giving it his best but this is a horrible problem. Chris Cox, head of SEC, and his pathetic ban of shortsellers doesn't look so smart now, does it. Anyways, I thought it would be helpful to post some articles that helped alert me to what was going on.
1st: Matt McCall, a MD at Portage Ventures. Matt came to speak at Kellogg a few times while I was there. He seemed like a nice guy and I was impressed about how realistic he seemed. I started reading his blog and I was rewarded when he posted this little gem about how he expected advertising revenue to start going down quickly. A little alarm bell went off in my head when I read this. He's the first guy I heard talking about an ad recession.
2nd: Marc Andreessens comments embedded in Ning's Series D financing. Andreessen is a founder of Netscape and Opsware and Ning. He's one of the most important people of the last 20 years and makes outrageously good points. When he says something, I pay attention. His final bullet point in this announcement read:
We raised the money to enable us to keep scaling given our accelerating growth (over 230,000 networks on Ning now, growing at over 1,000 per day) and to make sure we have plenty of firepower to survive the oncoming nuclear winter. At current growth rates, we don't need it to get to cash flow positive, but having lived through the last crunch, it's good to be conservative with these things.
That was March 2008 ladies and gentleman and it's as close as a tech luminary will get to giving advice. When I saw that, I got really scared.
That was March 2008 ladies and gentleman and it's as close as a tech luminary will get to giving advice. When I saw that, I got really scared.
3rd: Bill Fleckenstein. I've been reading Bill for about 8-9 years. He runs a pay site that is the best $100 you can spend in a year. Those $900 I've paid have saved me thousands. Plus, he's a great writer. You can read his weekend summary for free on MSN. I highly recommend you do this. He saw the credit crisis coming from 2001 and detailed the bad decisions and recklessness along the way. That's when I first started to understand what was happening and when I bought my first Gold and Short S&P500. Fleck has a book out taking Greenspan to task if you are interested.
4th: Three Authors: 1) Jim Grant, who writes the incredible Grant's Interest Rate Observer, 2) David Einhorn - MD of Greenlight Capital and author of Fooling Some of the People (thanks Walmsley), and Marc Faber, author of among things, Tomorrow's Gold. These people were all great sources of information. Grant and Faber saw this coming a mile away, and Einhorn exposed Lehman which we should be eternally grateful for.
5th: This American Life's team did an amazing public service when they produced Big Pools of Money. Listen to this podcast and you'll have a good idea how we got here.
Tomorrow will be the ramifications of the last few weeks.
